How Employee Benefits Drive Retention and Reduce Turnover Costs

Turnover is expensive. It’s also disruptive to your business. Employee benefits insurance can help you control turnover and the associated costs, and there are great options for businesses of every size.

The Hidden Costs of Turnover

When you sit down and do the math, it’s clear that turnover is even more costly than many employers realize.

To replace an employee, you need to recruit, hire and train a new worker. Every step of this process eats up your company’s resources. In the meantime, productivity may drop. There’s also a high risk for serious problems – lost knowledge, rookie mistakes, and other mishaps that cost your company even more money.

It’s hard to pinpoint the exact cost of turnover because there are a lot of variables involved, including the employee’s experience and skill level and their importance to the company. According to Gallup, a conservative estimate puts the cost at one-half to two times the employee’s annual salary. If your employee earns $80,000 a year, that would be $40,000 to $160,000. Some new hires don’t work out, either, so then you have to start the entire process over again.

And it might not just be one employee. Turnover is contagious. When one employee quits, other employees may feel emboldened to do the same. They may quit out of solidarity or curiosity, or they may quit because their workload increases and they can’t take the added pressure. Employees who quit may also invite their coworkers to join them at their new company. The more employees you lose, the more disruptive and expensive it becomes for you.

How Employer-Sponsored Benefits Support Employee Retention Strategies

It’s no secret that compensation is a key motivator for job seekers. Although cash is important, many workers will look beyond salary or wages to consider the value of employee benefits. If you’ve ever had to purchase your own health plan, you can probably understand this.

For workers, employee benefits provide a lot of advantages. Buying insurance on your own is expensive. Employer-sponsored benefits typically offer group rates which may make them more affordable. For life insurance and disability insurance, group benefits also offer a simple way to secure coverage without the burdensome medical underwriting requirements inherent to buying individual coverage. If workers don’t get their health, life and disability coverage through their employers, they might not get these important coverages at all.

When employees thrive, so does the employer. Employee benefits can support employee retention strategies by:

• Attracting high-quality workers. If you don’t offer employee benefits, you may have a hard time hiring the most qualified and in-demand workers.
• Giving workers a reason to stay. If you offer a great health plan and other benefits, workers may think twice about quitting and losing those benefits, even if they get another offer. A robust benefits package can keep the employee poachers at bay.
• Taking care of your team. If your employees don’t have health insurance, they may not get the care they need when they need it. Without routine and preventive care, health conditions may get worse and require more time away from work. Left untreated, physical and mental health challenges can reduce productivity or even force people out of the workforce. By helping your team members get the care they need, you’re helping them stay productive, positive and focused on their jobs.

Small Business HR Solutions and Affordable Benefits Plans

Businesses of all sizes can offer employee benefits – and yes, that includes small businesses with limited budgets. There are affordable benefits plans available to small businesses, and you can use voluntary benefits to round out your benefits package with little or no cost to your company. When you leverage the tax advantages, offering employee benefits can make more financial sense than just focusing on competitive salary packages.

Mavrix can help you build an employee benefits package that drives retention and reduces turnover costs. We offer group health insurance, life insurance and retirement savings plans for small businesses, and we do more than just sell insurance. We’ll work closely with you to understand your needs and budget, so we can build a customized package. We’ll also offer support to reduce the burden on your HR department.

Interested in learning more about Mavrix employee benefit solutions?
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